Kazakhstan May Take Over Karachaganak Gas Plant Project Amid Investor Delays - Bloomberg

Kazakh authorities are considering taking control of the Karachaganak gas processing plant project due to delays and cost overruns by foreign investors, Orda.kz reports.

According to Bloomberg, citing sources, the Karachaganak Petroleum Operating consortium — led by Eni and Shell — has postponed the plant’s completion from 2028 to 2030 and raised the cost estimate to nearly $6 billion.

Investors are also reportedly asking Kazakhstan to contribute $1 billion to help cover costs and ensure project profitability.

Kazakhstan is dissatisfied with this request and may transfer the project to the state oil company KazMunayGas. On May 19, KMG CEO Askhat Khasenov publicly criticized the construction pace. Authorities are also unhappy with the revised cost, which has nearly doubled from the initial estimate of $3.5 billion.

Neither the Ministry of Energy nor Karachaganak Petroleum Operating has issued an official comment.

Tensions between Kazakhstan and the consortium over costs have been public since September last year. Foreign companies want either a higher price or reduced capacity to ensure returns, but the Kazakh side disagrees, especially amid a growing need for domestic gas processing.

The Karachaganak consortium has also been fined for environmental violations.

Original Author: Nikita Drobny